Not every course session is taught each year. The current course schedule details what is being offered this year.
Introduction and Overview (3)
An outline of the scope of the course and its instructional methods; an assessment of the changing nature and content of financial management (especially accounting) for oil and gas operations; a review of comparative financial information measurement and reporting systems around the world.
Some Background to Oil and Gas Operations, Exploration, Development and Production (6)
An introduction to some of the issues including reserves, tools, methods and background of the industry touching briefly on the occurrence, migration and entrapment of oil and gas in the reservoir; exploration and development methods; petroleum geology & reservoir engineering; production mechanics; the nature of oil and gas and some comments on the refining sector. An outline case approach to the exploration, later development and production of a field will be used to illustrate alternatives and will cover aspects of geology and production engineering integrated into economic concepts. These sessions will introduce the broad concepts affecting economics and viability from a practical view of the industry fundamentals and set the scene in particular for the adjoining sessions on International Economics of Oil and Gas as well as relating these practical aspects to other course sectors.
International Economics of Oil and Gas (6)
A transnational view of different economic methods of assessing oil and gas exploration and development opportunities for government, state concern or private industry. The sessions will focus on practical approaches for assessing project viability. This will be illustrated with examples from different countries.
The assessment of competitive fuels including the rapidly growing international gas business, LNG, the impact of price changes and of political and legislative risk are also discussed. Consideration is given to what attracts development funds initially and the relative position of private and state-owned concerns. A key aspect of these sessions will concentrate on what makes good project economics with a discussion of some of the pitfalls to be avoided. A case study will be used to put many of these individual approaches in context. The intent is to put international decision economics in the light of common sense practical petroleum- related investment in the current climate.
Oil and Gas Accounting (12)
Detailed review of accounting principles, practices and procedures relating to various phases of oil and gas operations, including: property acquisition, retention and surrender; predrilling exploration; exploratory and development drilling; impairment and amortization of capitalized costs; oil and gas production; joint interest operations, and the related financial statement disclosures. Participants will be asked to comment on their oil and gas accounting systems.
International Oil and Gas Law (12)
A review of different contractual arrangements used to explore, develop and produce oil and gas. The evolving contractual granting process will be analyzed by studying fundamentals of licenses, concessions, risk service agreements and production sharing contracts. Specific emphasis will be given to: fiscal and economic regime, work commitments, work programs, terms, government compensation and government share, use of local companies and workers, government operating companies, surrender provisions, marketing, natural gas, exchange controls, arbitration, and force majeure. As most oil and gas operations are joint ventures, joint operating agreements governing shared operations will be analyzed. Specific attention will be devoted to the: operating committee, operator authority, expenditure process, sole risk and non-consent, assignments and preferential rights. The Model Form International Accounting Procedures will be analyzed and discussed along with a typical Host Government Accounting Procedures. Participants will be asked to briefly present to the class the legal, fiscal and economic regime used in their country.
Financial Statement Analysis (3)
This session covers the theoretical background and analytical tools necessary to understand and interpret financial statements. It provides detailed information on several analytical methodologies including common size financial statements, ratio analysis and credit ratings. A comparative study of several international energy companies highlights the practical aspects of these approaches.
An appraisal of the diversity of financial reporting and disclosure practices around the world, including accounting clusters, international accounting classifications, foreign currency translation, inflation accounting, segmental reporting, consolidation and transfer pricing. Harmonization of financial accounting diversity.
Understanding Financial Statements (3)
This segment of the Program is designed to provide the participants with a conceptual understanding of the nature and uses of the primary corporate financial reports – the income statement, balance sheet and cash flow statement. Also includes reviews of the Notes to the Financial Statements, the Supplemental Reporting Requirements for Oil and Gas Companies and external audit reports.
Environmental and Corporate Social Responsibility Issues in International Oil and Gas Operations and Transactions (3)
A discussion of the complex set of issues facing international oil and gas companies in terms of environmental and sustainability issues, and the expansion of environmental matters into the broader realm of corporate social responsibility. As climate change, greenhouse gas emissions and carbon trading have become increasingly significant risks and potential opportunities, companies need to focus on developing strategy for addressing these issues. The discussion will explore how these companies can attempt to succeed and profit under the complex set of pressures, liabilities, influences, laws, and stakeholders involved in the environmental and corporate social responsibility realm. Success in this constantly changing area requires the international oil and gas company to be adaptive: to be able to evolve with the constant changes in the legal, political, social and economic environment. In the financial area, the discussion will include potential legal liabilities, means of addressing these liabilities in contract negotiations, evaluation of environmental insurance options, and environmental financial reporting.
International Taxation of Petroleum Enterprises (9)
General review of taxation systems of the world; comparative international tax systems; tax treaties and their impact on international taxation; foreign tax credit-concept and application; US tax system in general, taxation of foreign operations, taxation of domestic operations by foreign persons, US taxation of oil and gas industry; taxation of oil and gas in developing countries. Participants will be asked to comment on or outline their country’s taxation system, with particular reference to oil and gas operations.
The Audit Process (3)
The auditing of operations (e.g., financial, operational and computer auditing), and internal and external audit problems of oil and gas activities; and the interrelationship with accounting principles and standards. The various international auditing standards (ISA) and their relevance for oil and gas financial management.
Refinery Operations & Accounting (5)
The “inside” story of plant operations; markets for crude and products; petrochemicals and common usages; volumetric and financial accounting issues; product costs, depreciation and amortization; LIFO and FIFO choices; issues surrounding construction of new refineries and chemical plants. Those attending will gain an appreciation for the engineering and chemistry issues which drive the underlying business.
International Accounting Concepts and Standards (6)
An overview of the status of International Accounting Standards (International Financial Reporting Standards) and their relevance to oil and gas accounting; efforts to harmonize international and regional accounting concepts, procedures, and practices; discussion of the United States Securities and Exchange Commission’s views on International Financial Reporting Standards, considerations when registering securities with the Securities and Exchange Commission from an international viewpoint. Harmonization of financial accounting diversity.
Strategic and Tactical Planning in the Energy Industry (4)
This module includes segments on Strategic Planning, Budgeting and Performance Reporting. It includes a discussion around crafting vision statements, strategic goals and strategies. Real world examples are used to illustrate effective strategic practices. Detailed reviews of the budgeting and performance reporting processes highlight the methods for linking plans to operations.
Building a Learning Organization (4)
This segment deals with processes that enable organizations to initiate successful change programs by bringing new information and ideas into the corporation. It highlights such key concepts as competitive advantage, strategic analysis, scenario planning and perspective in decision-making. Presentations on competitor analysis, benchmarking and managing risk round out this part of the Program.
Feasibility Studies & Project Financing (3)
Case studies in Project Financing; an appraisal of technical aspects of project evaluation, and details of project economics, with emphasis on how technical data are translated into the numerous assumptions that constitute the economic model of the project; elements of primary concern to banks, and development of a particular cash flow profile; typical methods of performing feasibility studies, economic criteria, debt capacity tests, and project studies; risk analysis, cash flow projections, and project finance and capital requirements.
International Financing of Oil and Gas Operations (3)
Project financing and capital requirements; financing techniques used by international lenders in the areas of field development, pipelines, process facilities, and equipment; evaluation of elements of risk relating to credit, reserve, construction, operation, market, force majeure, and the state in their relationship to the financing; discussion of loan documentation with an explanation of terms and elements critical to each financing concept; host country problems and issues in financing. Case study.
Planning and Control of International Operations: Other Controllership Issues (3)
An appraisal of various planning and control issues faced in international operations; inter-country difficulties; the role of the controller; the interaction of financial planning and control issues.
Fraud: Detection and Prevention (2)
A review of the white collar crime problem, the elements of fraud, a profile of typical white collar criminals, the most common types of fraud crimes, and indicators of fraudulent acts that the financial professional often is in the best position to detect. The course provides an overview of the fraud examination as a methodology of resolving fraud allegations from inception to disposition.
Ethics and Compliance Programs (2)
Most large companies implement a code of conduct to guide employees, officers and directors in complying with laws and regulations. The United States Federal Sentencing Guidelines defined an effective compliance program. This presentation will discuss the definition of an effective compliance program and what companies do to guide their employees.
Sustainability for Oil & Gas Operations (3)
An assessment of the socio-economic aspects included in oil and gas operations, including the accounting, auditing and reporting for environmental aspects, health and safety. The information needs for stakeholders, the groups that have a direct stake in the affairs of an organization are the focus. A sustainability index that tracks the performance of organizations reflects such broader responsibility. The governmental regulatory aspects of a national and international nature are becoming more and more significant. It furthermore deals with the human resource and ethical aspects, and the valuation and evaluation of such services.
Financing of Operations: Principles, Practices and Analytical Tools (3)
This module examines the financial instruments that financial managers use to finance corporate operations and capital investments. The topics covered include the basic financing instruments used to raise capital, the principles and analytical tools used in evaluating the maturity mix for corporate debt, and the impact of the mix of debt and equity use to finance corporate operations on the firm’s overall cost of financing. The basic financing instruments reviewed include common stocks, bonds, commercial paper, and commercial bank financing.
Analysis and Financing of Investments in Oil and Gas Operations (3)
This module investigates the analysis of investments in oil and gas operations and explores the respective roles of internal equity capital and debt in the financing of the exploration, development, and production costs of oil and gas companies. An actual case example is used to develop the principles, practices, and analytical tools used in the analysis of credit and the structuring of loans. Emphasis is placed on the use discounted cash flow analysis to value reserves.
Risk Management (3)
The role of price risk management in achieving a more stable underlying business is discussed, emphasizing the differences between hedging and speculation. The discussion is applicable to upstream and downstream programs. The approach begins with definition of strategy and continues with accounting, controls and organizational structure to properly manage a risk management team.
Turning Around an Oil Company: The Oxy Case
What did it take to turn around one of the worst managed companies in the Fortune 500? How did Oxy become the oil company with the most profit per barrel? How did Oxy get to be #1 on Fortune’s 2010 “Most Admired” list for its market space? The answers center around a CEO who emphasized agility as a management style and created a culture that simultaneously emphasized safety, productivity and profitability. Going for cash flow and shrinking to improve profits were key indicators.
Note: Comparative Evaluations
A major program objective is the exchange of experience and ideas among participants from a variety of oil-producing countries. Participants are requested to bring with them significant materials pertaining to their country’s accounting regulations, investment laws regarding oil/gas operations, and similar taxation aspects for evaluation and discussion within the classes.